Public Bill Committee

[Mr. Peter Atkinson in the Chair]
BRS 05 City of London Corporation

Peter Atkinson: After our evidence sessions of last week, we now move to more familiar territory.

Mark Field: On a point of order, Mr. Atkinson. I appreciate that the nature of the Bill means that there is no formal programme motion debate, and I seek your guidance on how we might address a particular issue. As you are aware, the Bill has had some high-profile attention as a result of news stories in the press. Will I be able to ask the Minister for Local Government whether he has been approached by Members of the other place about the matters before us?

Peter Atkinson: Order. I must stop the hon. Gentleman. The Programming Sub-Committee has set a timetable for this Committee. The matter that he raises has absolutely nothing to do with the contents of the Bill.

Mark Field: Further to that point of order, Mr. Atkinson. I do not wish to criticise the Chair or answer back, but my point is relevant. The Governmentlike any Governmentare well aware that they can get their business through the Commons without any great difficulty. Therefore, we go through the whole process that we have seen in the Commons. The concern is that in the Lords, where there is no majorityat least as the Lords is currently constitutedamendments can be tabled that have a lot more sway than is, perhaps, the case here. That is the reason why I wish to put the issue on the record.

Peter Atkinson: Order. It is clear that nothing in the Bill is relevant to what the hon. Gentleman is saying. As to what happens in another place, that is up to another place, and is equally irrelevant. I appreciate what he is trying to do, but it is not in order.

Clause 1

Power to impose a BRS

Daniel Rogerson: I beg to move amendment 1, in clause 1, page 1, line 7, leave out is and insert
and the majority of the affected business community are.

Peter Atkinson: With this it will be convenient to discuss the following: amendment 25, in clause 4, page 3, line 21, leave out from beginning to second ballot and insert a.
Amendment 5, in clause 4, page 3, line 21, leave out
where there is to be.
Amendment 6, in clause 4, page 3, line 21, leave out , the ballot.
Amendment 7, in clause 4, page 3, line 24, at end insert
(2) Subsection (1)(c) does not apply in relation to Crossrail..
Amendment 36, in schedule 1, page 22, line 36, leave out sub-paragraphs (a) and (b) and insert
the arrangements for the ballot.
Amendment 37, in schedule 1, page 22, line 39, leave out sub-paragraphs (a) and (b) and insert
the result of the ballot.
Amendment 10, in clause 7, page 4, line 32, leave out from BRS to end of line 42.
Amendment 11, in clause 7, page 5, line 8, at end insert
(6) This section does not apply to Crossrail..
Amendment 27, in clause 7, page 5, line 8, at end add
(6) This section does not apply to the Crossrail project promoted by the Greater London Authority..
Amendment 12, in clause 8, page 5, line 10, leave out
If a ballot on the imposition of a BRS is held,.
Amendment 28, in clause 10, page 6, line 12, leave out from beginning to second a in line 13.
Amendment 29, in clause 10, page 6, line 46, leave out from BRS to end of line 13 on page 7.

Daniel Rogerson: I take this opportunity to formally welcome you to the Chair, Mr. Atkinson, and to thank you for the excellent way in which you conducted our evidence sessions. I am sure that you will agree that they were very useful, as well as informative and helpful to us. That leads us nicely to the matters that we will be discussing this morning and in future sittings.
Amendment 1, which is in my name and that of my hon. Friend the Member for Solihull, goes to the heart of the business communitys concerns about the Bill. As we heard in the evidence sessions, there are grave concerns about the ability of businesses to influence the decision on whether a supplement is enacted in their area. The Minister of State has been keen to point out that the consultation is a key part of the Bill, and that is welcome, but as we heard time and again, there are concerns that that does not go far enough. A ballot would be the ultimate reassurance to the business community that the extra contribution that it is asked to make will be put to what it believes is a good use.
The amendment would include the business community in deciding what is of recognised benefit and interest to an area by making sure that the majority of that community is satisfied that the projects funded by the supplement will promote economic development. As it stands, only the levying authorities need to be satisfied of that. It is important to make it clear in the Bill that, since the supplement will be a key contribution by businesses, they have a role in the consensus on moving forward.
Amendments 5 to 7 refer specifically to ballots, and insert the need for a ballot in all cases. As we went through our evidence sessions, one issue emerged time and again: while the business community had concerns about the timing of the Bill, they were prepared to accept that, where important projects were being taken forward in the local area, business should make its contribution. We heard that this form of property tax was perhaps not ideal and that there were issues regarding owners of propertyas opposed to tenantsand how they could make a contribution. The fundamental concern was that the business community should have the right, through a ballot, to sign up to, or reject, any proposal.
When the British Retail Consortium was asked about a ballot, Jane Milne said:
It is, as far as we are concerned, the single most crucial step as to strengthen the safeguards. There are already safeguards within the Bill, but we do not feel that they go far enough.[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 19, Q82.]
We also heard from the British Chambers of Commerce. Mr. Frost was asked whether it would be more reassuring to include a ballot. He said:
Yes, to use that terminology, it is far less scary, because it gives the business community the ability to become involved. The worry with the other programmes that I have mentioned is that they would be seen as an imposition.[Official Report, Business Rate Supplement Public Bill Committee, 20 January 2009; c. 24, Q99.]
Dr. Grail, representing British BIDs, expressed concern that where a proposal for a business improvement district was being developed, if there were no ballots on a business rate supplement in the same area, businesses might feel that the only chance they had to prevent being overburdened by additional taxation would be to reject the BID. There were concerns that the lack of a ballot on a business rate supplement might influence how people would vote on a BID in the same area.
From our earlier sessions we heard that many Members, of all parties, felt that the BID process has been constructive and useful, and has achieved a great deal in areas where it has been enacted. Conflict between a BID process and a business rate supplement, if there were to be no ballot for a BRS, could be a crucial issue.
My hon. Friend the Member for Solihull and I were also keen to show through our amendments that we feel that Crossrail is a different case, so it was interesting to hear the evidence from the Confederation of British Industryit feels that Crossrail is separate, as well. Karen Dee said:
Businesses will vote for something if they see that it is of benefit to them.[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 39, Q163.]
We discussed the issue then and the feeling was that Crossrail is different: the process has gone on for a very long time and there has been a great deal of debate; and there has been a Bill through Parliament allowing us to look at the issues very closely. For that reason, we concluded that the provision for a ballot in all cases should not apply to Crossrail.
I am sure that the Minister will want to reply to that and say that we should either have a ballot in all cases or in none, but it is clear to Opposition Members that Crossrail is a unique project. Given its scale, scope and national importance, and the clear expressions of will and involvement by all parties throughout, it should be treated separately. That is why our amendments would provide for a ballot in all cases other than Crossrail, including all new projects.
The key issue is to take the business community forward with us. The Local Government Association felt very strongly that it would be able to do so through debate and consultation with the local business community. I hope that that would be the case in many projects and that a ballot would deliver a yes vote, or would not even be approached, as there was already that consensus and the feeling that everybody was moving forward together. However, there still seems to be a concern in the business community that, without the ability to call for a ballot to focus everybodys mind and ensure that the process is as constructive and inclusive as possible, the consultation might not prove as effective. So I am certainly very happy to commend the amendment to the Committee. From our point of view, the significant amendments in the group are 5 and 6, which would make a ballot compulsory, no matter what the size of the contribution being made by the BRS to the project.

Mark Field: Will the hon. Gentleman indicate who would qualify for such a ballot? I do not wish to do the Governments arguing for them, but it seems that this is a rather complicated situation. Would the qualification be on the basis of being a leaseholder at a particular time, a freeholder or an owner of property, or of having a particular interest? As he will know, in relation to the existing business vote in the City of London, in my constituency, it is only relatively recently that the qualification has gone beyond simply those in partnership and sole practitioners of businesses to a corporate vote with a complicated structure. How does he envisage the ballot and the qualification for it working?

Daniel Rogerson: We are not seeking to change the conditions in the Bill about who would qualify for a ballot, and when we come on to talk about thresholds, we will discuss those on whom the rate will be imposed. The issue is that the Bill defines a set of circumstances that would trigger a ballot, which is when a certain percentage30 per cent. or soor more of the total scheme budget is to be funded by the BRS. Below that proportion, it will not be necessary to hold a ballot. Given the evidence that we heard and the written submissions that we had from the business community, there is a great deal of concern that the provision does not go far enough and there should be a ballot in all circumstances, and that is what my amendment seeks to introduce.
I will therefore be interested to hear the Ministers response. I suspect that I can anticipate some of the arguments because we rehearsed them a little during the exchangesI hesitate to call them debatesin our evidence sessions. I will obviously wait to hear what the Minister has to say, but I hope he will feel that the evidence that we heard in our earlier sittings is convincing enough to move to having a ballot in all circumstances. If I am not entirely satisfied, I may well seek to press some of the amendments to a vote.

Bob Neill: Welcome back to the Chair, Mr. Atkinson. I am delighted to see that it is as sunny in London as it was in the north-east of England when I was there yesterday.
I have much sympathy with the amendment moved by the hon. Member for North Cornwall. In broad terms, my colleagues and I are minded to support it but we have tabled our own amendments. They are grouped here in a different formulation but they would achieve essentially the same objective. I shall speak to those as well as to the hon. Gentlemans amendment.
The hon. Gentleman is right to say that the amendment concerns two of the Bills key issues. Principally, there is the question of whether there should be a compulsory ballot in all cases. My hon. Friends and I adopt the stance that to meet the Governments objectives of ensuring that the BRS system has credibility in the business community, a ballot is essential in all cases. The threshold that the Government proposethat a ballot should be required only when the BRS will raise more than one third of the total cost of the schemeseems to us, with respect, a somewhat arbitrary figure. One can think of schemes, particularly some of the joint schemes, that are proposed for transport infrastructure where a quarter or a fifth of the total cost would be a very large sum. In the evidence sessions, Government Members talked about transport schemes for bridges and tramwaysthat is substantial capital investmentand a quarter or a fifth of the cost would be a very substantial burden to place on businesses.
It may be, if the case is convincingly made, that businesses will consider it a worthwhile investment, and I do not have an objection to that. That is why my hon. Friends and I have always supported the concept of the business improvement district and would be happy to see it implemented further. The key test, however, is that businesses can buy in.
We are particularly concerned in the present economic climate about the potential imposition of large levies without a ballot. We are worried that, without a ballot, there will not be the necessary discipline on local authorities that choose to take up a BRS scheme, although in the current climate how many schemes are likely to be proposed is questionable. Witnesses from the Local Government Association could not think of any bodies apart from the Greater London authority proposing a project. However, as and when the schemes arise, it would be a useful discipline and serve to concentrate minds if local authorities knew from the outset that they would have to take the business community with them and produce something that is acceptable to a majority of them through the double-lock mechanism, which is a sensible safeguard.
I am grateful to the Minister for publishing the consultation guidance, as he promised he would, last Friday afternoon. I do not disagree with the aspirations that it sets out for the early involvement of the business community, but the fact isI speak as one who has been involved in local government for much of my careerthat some local authorities are more proactive and assiduous than others about involving their business communities. A mechanism that requires local authorities to engage with their local businesses, because they need businesses votes at a very early stage, would surely be more effective.

Derek Twigg: Can the hon. Gentleman give an example of a local authority that does not consult or involve its business community in any of its decisions? The local authority in Nottingham consulted the local business community, although it ended up disagreeing with it.

Bob Neill: I shall give the Committee a highly publicised example that is now in the process of being overturned. When the previous Mayor of London chose to consult on the western extension of the congestion charge, he went through every statutory hoop and requirement that he was obliged to go through in such a way as to be proof against judicial review. It was clear that the businesses, and indeed residents, did not want the extension to be imposed, but the regime, which is the same as the one that will be in place for BRS, enabled him to ignore the opposition and go ahead. The fact is that, under the current rules, a situation could arise where a local authority[Interruption.] I think the Minister wants to intervene.

John Healey: I am trying to follow the hon. Gentlemans logic. Given the example that he cites, his logic seems to be moving towards the proposition that there should be a ballot in London, as elsewhere, if there is to be a BRS. That appears to contradict some of the amendments that he will speak to later.

Bob Neill: I am grateful to the Minister for raising that point, but if he follows my argument, he will see that that is not the case. I shall discuss later why Crossrail is a different case. Under the present regime, if a local authority has the political will to impose a scheme, it is not obliged to take the majority of businesses with it. The evidence and the example that I cited demonstrate that that was the case under the previous Mayor of London.
The proposal in the Bill and the existing arrangements give local authorities the opportunity to decide, by a narrow political majority, to implement a scheme, even though it might have been rejected by businesses or there is clear evidence of their opposition. It would be better to test the proposal and get businesses on board. I hope that the hon. Member for Halton is correct in his aspiration that local authorities will not go down a route that will bring them into conflict with local businesses, but localism always carries that risk. Businesses in the present climate need to have some protection against that.
Another point that worries many businesses and is flagged up in the consultation document is that, without the ability to have a ballot, there is a risk of an accumulation of burdens being placed on them. We will come to automatic set-offs for BID levies later, but the BRS and BID schemes, as well as the possibility of community infrastructure and workplace parking levies, could impose a cumulative burden. A real concern in the business community was demonstrated throughout the evidence sessions about that cumulative burden being, for many businesses, the straw that breaks the camels back.
For all those reasons, if the Government are genuine about giving local authorities a power to raise revenue that is truly and demonstrably additional, it is important that the local businesses who paywho may pay substantial sumsare able to have a say on whether they are convinced that there is genuine additionality. If the case is made out and the local authority engages with its business community from the start, it is much more likely to get a result that everyone buys into, which would be to everyones advantage.
I hope that the Government will think again about the amendments. I cannot for the life of me see why they would not. The Minister will probably say that he has come to a pragmatic and rational decision that a third of the cost is a reasonable ballpark figure for the threshold. It might be, but he could equally say the same about a quarter or a fifth, because an element of arbitrariness is inevitable in any threshold. Some sort of de minimis exception might be better, and the Minister conceded that we could discuss that. If there is not to be such an exception, there should be a ballot.
On why we do not take that stance on Crossrail, I am perfectly happy to say that Crossrail is and should be an exception, for the perfectly good reason that Crossrail is a project that has been discussed and consulted on within London among business rate payers and voters. London has had an electiona democratic processin which all the major party candidates standing for Mayor were committed to Crossrail and the funding package for the project. Londoners had a chance to have a say on Crossrail.

Sadiq Khan: Will the hon. Gentleman remind us how many people with businesses inside London but who live outside London had a say in that decision?

Bob Neill: It is interesting that the Under-Secretary says that, because of a point that struck me during the evidence sessions. Is he hinting that there should be the reintroduction of the business vote in such circumstances? I am sure that his hon. Friends would not like that. My answer to him is that not only was there a democratic election in London, but all the representative business bodies supported the Crossrail funding package. Equally, those same people said, Although we accept that it works in London for Crossrail, we do not want it imposed elsewhere.

Mark Field: If my hon. Friend will allow me to half-answer the Under-Secretarys question, of course a significant number of businesses in the City of London, with people who are employees or partners of the business but who live outside, were able to have their say. I accept that it was by no means an entirely satisfactory arrangement, but an important cross-section of the business community had its sayincluding those in the business community who live outside London. The City of London corporation, as the Under-Secretary and my hon. Friend will be well aware, keenly supports Crossrail, albeit not without making certain criticismsfor example, about the route, which we shall discuss later. None the less, in that rather unsatisfactory way that we have in the context of the corporation, the business vote has had a certain say. In fairness, I should say that the business community is very much in favour of Crossrail, and wants it to be built as soon as possible.

Bob Neill: I am grateful to my hon. Friend for that. I accept his point that, inevitably, unless return to the 50s system of a separate business vote, which no party is proposing, that arrangement is imperfect. However, in a large area of London, there was the ability for a great number of Londoners, including a number of business rate payersnot all, of course, because some live outside the boundaryto have a say.
In addition, because of how the Crossrail process has been gone throughby the previous Mayor and the current on, as well as the candidate for the Liberal Democratic party and othersthere has been a genuine attempt at dialogue and engagement across the political parties and a broad political consensus within London. That was reflected in support for the project before the scheme was brought forward by the business communityLondon First, the London branch of the British Chambers of Commerce and the CBI supported a BRS as part of the funding package. They were not saying that it was an ideal measure, but in the case of Crossrail, they said that they were prepared to chip in and that that was a mechanism through which they could move the project forward. That is a pragmatic and sensible enough view, but it does not mean that that approach is appropriate anywhere else in the country.
What amused me in part of the Under-Secretarys comment is that he seemed to present my hon. Friends and I as people who are denying the rest of the country a great opportunity. I suggest that what we are seeking to do is to save the rest of the country a potentially great burden. The Government are trying, through characteristic sleight of hand, to take the consensus and agreement that a BRS scheme is an appropriate mechanism for Crossrail and use it as a stealth device to increase tax burdens elsewhere in the country, where we know from the LGA there is no demand. There is a demand in Londonthe Mayor of London submitted evidence saying why that was so, as did London business. There is no such evidence elsewhere.

John Healey: Stealth tax? I am struggling with that. It is a common phrase that we hear from the party opposite, but how can the hon. Gentleman describe a business rate supplement as a stealth tax when there has been a public report from Sir Michael Lyons, a White Paper, and parliamentary scrutiny in both Houses of the legislation? If a local authority believed that a business rate supplement was appropriate for its area, there would be lengthy discussion, formal consultation and, in some cases, a ballot. I simply cannot see how this measure merits the description of stealth tax, which surely implies something that people were not aware of, not expecting and were suddenly confronted with. Does the hon. Gentleman not accept that, for the purposes of serious scrutiny, that is simply not helpful or accurate?

Bob Neill: I am surprised that the Minister departs from his normal precision in following my argument. I appreciate that he may have had one or two little distractions over the weekend, but perhaps he could follow my argument carefully. I accused the Government, and I do not resile from the accusation, of using the consensus on the use of the BRS as part of the Crossrail funding mechanism as a stealth device to then impose a tax-raising power elsewhere in the country, where there is not the same level of demand as has been demonstrated in relation to London and Crossrail.
That can be described as a stealth device for this reason: although there has certainly been debate in the broader context of Lyons and the White Paper about the BRS, until the Government published the Bill, there was nothing to suggest that they intended to make the link between the funding of Crossrail, which has had its own separate Act of Parliament, and rolling out the BRS power elsewhere in the country. That was not necessary; the two could have been decoupled. The Government could have introduced a Bill to fund Crossrail and then a separate Bill to consider the broader principle of rolling out BRS elsewhere in the country. That is the stealthiness of which I accuse the Minister.

Nick Raynsford: The hon. Gentleman presents his position as defending the rest of the country from the imposition of a burden. I shall give him the benefit of the doubt and assume that he does not see his role as a London MP as imposing an unreasonable burden on London, because that would be the logic of his position. He clearly does not think that, because he thinks that Crossrail will deliver benefits which are such as to outweigh the cost on business of paying the BRS in London. Why does he believe that a similar arrangement should not be possible outside London?

Bob Neill: With respect, the right hon. Gentlemans logic is flawed. In the case of Crossrail and London, where there is a broad consensus, it is perfectly reasonable to go down a route that was established before the Bill was introduced: there was commitment and sign-up to a BRS part-funding the package for Crossrail. However, the Government then coupled the Crossrail project with rolling out the broader Lyons proposals, which was not necessary.
Why do I say that we are protecting part of the country from a burden? I say it simply because, without a ballot in all cases, there is the prospect of a BRS being imposed on businesses in areas where there is no demand. In London, the consensus had arrived before the Bill appeared. What the Government are doing is using inverse logicsaying that because there is agreement in London without a ballot, we do not need a ballot anywhere else. That is the false logic that is being deployed in the debate, not any argument put by the Opposition.

Mark Field: Will my hon. Friend make it clear that if we were discussing the Bill 10 years agoin other words, before the Crossrail Bill had been consideredwe would have been arguing just as forcefully for a ballot on Crossrail? However, we are now a long way down the line in the Crossrail process. The amendments are therefore geared towards involving the business community through a ballot system. As my hon. Friend rightly says, there is a certain level of arbitrariness regarding the thresholdthe proportion of the overall spendbefore a ballot is held, but we want to involve business as far as we can through a ballot.
Crossrail is a bit of a red herring. I can understand why Government Members are making a lot of it, but the reality is quite straightforward, because we are so far down the line, for want of a better phrase, in relation to Crossrail. Had the Bill been introduced 10 years ago, Crossrail would clearly have been part and parcel of the provisions on ballots that we are now trying to establish.

Bob Neill: I very much agree with my hon. Friend. We have to be realistic as far as Crossrail is concerned. We are where we are, and if we had not adopted the stance that we did in relation to Crossrail, no doubt the Government would have accused us of trying to block or sabotage Crossrail. They cannot do that, because we made it very clear that we are realistic about where we are with Crossrail, and that we want to get on with it. What they cannot do, although they are trying, is to use Crossrail as a shield against criticism of their proposals elsewhere in the country. If they want to deflect criticism or reduce our criticism of their proposals for other areas of the country, they could do so by accepting the amendments that we and the hon. Member for North Cornwall have tabled providing for a ballot in all cases. There would then be an appropriate safeguard for businesses and the criticisms would have far less force. They choose not to do so, so the situation is of their own making.

Neil Turner: I would like the hon. Gentleman to clarify two points. First, he talks about the consensus within London, but every party was in favour of Crossrail. How can one judge the degree of consensus when the people of London did not have the opportunity to vote against it? All the candidates in the London mayoral elections were in favour of it. Secondly, may I remind him that elections in London are held once every four years, but in the rest of the conurbations of England we have elections every year? These projects will take place over a number of years. It will tend to be large projects that are supported by the supplementary business rate, so there will be the opportunity for consultation over a number of elections. The situation will not be the same as in London, where a project could be introduced after an election and be sorted out before the next one.

Bob Neill: I have great respect for the hon. Gentleman, but he has not been listening to some of the previous arguments. The fact that all the major parties stood on the platform of supporting Crossrailfor exactly the reason that my hon. Friend the Member for Cities of London and Westminster gave, that everyone accepted that we were where we weredemonstrates that there was substantial buy-in among the voters. People could have voted for Respect, and I suspect that the UK Independence party and the British National party were also rather critical of Crossrail, but they did not, for obvious reasons.
We also had evidence from representatives of the London business community that in the circumstances, to kick-start Crossrail, London businesses were satisfied that the mechanism was one that they could live with. The fact that there are annual elections to the unitary authorities elsewhere in the country does not alter the argument. It is perfectly fine and helpful to have elections so that votersthe domestic council tax payerscan have their say on whether to have a council that continues with a BRS scheme. I do not have a problem with that, but that is no reason to say that non-domestic rate payersthose who contribute not through council tax, but through the BRSshould not have a ballot, so that they can have their say. The two are not mutually exclusive in any way.
If the Government conceded the principle that there should always be a ballot for a BRS scheme to be imposed, none of this argument would be necessary. The local authority could go forward, taking the domestic council tax payer vote with it in the elections in the ordinary way, but it would also be able to get buy-in from the business occupiers through a ballot. There would not be the potential conflict that the Governments scheme gives rise to.
In a rather larger nutshell than I had intendedalthough I hope I have enabled hon. Members, including Labour Members, to vent their viewsthose are the reasons why we proposed our amendments and have sympathy with those tabled by the hon. Member for North Cornwall. We certainly wish to see votes on such matters in due course. The other amendments in my name in the group are consequential, relating to the holding of a ballot in every case apart from Crossrail. I hope that that deals comprehensively with this group of amendments.

Brian Binley: It is a pleasure to serve under your chairmanship for the first time, Mr. Atkinson.
I do not want to enter the private grief of Crossrail as regards Londons payment for it, but outside London many people are dubious about the scheme. They fear that it will cost about £25 billion, perhaps more, but do not see it helping them in any way. They feel that that amount of money could be much better used on infrastructure elsewhere.
Having got my bit about Crossrail out of the way, let me explain why a ballot of businesses is vital if we want acceptance of the concept from the business community. I need not tell the Minister about the need to reassure business, because the evidence is plainly in front of him, from almost every business organisation in the country. From my own anecdotal evidence, local business is frightened to death of giving governmentparticularly local government, which has not proved to be the most efficient instrument in this country for moving our society forwardthe ability to raise even more money from the community, particularly the business sector and at a time when Government support for local authorities has been reduced over the years in percentage terms.
Let me tell the Committee why the business community is so concerned. That concern surrounds two major areas. The first concern arises from the appalling episodes and examples of consultation undertaken by local government the length and breadth of the country. We have one at the moment in Northamptonshire, where the portfolio holder responsible for the consultation has herself said that it has not been well organised. In fact, I have not seen one local government consultation that has been well organised.
The thrust of the Government argument seems to suggest that it is okay not to hold a ballot, if less than 33 per cent. of the total cost is to be borne by business, because there will be consultation. I would like the Minister to present evidence of quality consultation in local government. I would like him to tell me how many people with an expert knowledge of the art of consultation are employed by local government. I would like him to show me where consultation has been accepted by the local populace as being effective and meaningful, because in my experience the opposite is true.
Having worked in the business of marketing and public relations for most of my adult life, I look at the consultations emanating from local government in my part of the world with horrorhorror at the amateurish nature of the whole process every time. The Minister needs to reassure us as to why he thinks there will be this massive step change in the quality of local government consultation in order to pursue his argument that, in the context of projects involving a contribution of below 33 per cent. from business, such consultation will allay those fears. I assure him that it certainly will not.

Mark Field: My hon. Friend makes some interesting points about consultation. Does he not accept that, particularly in relation to quite a few local programmes, all too often there are some deep-rooted interests whose concern, however much consultation they get, is the outcome of a particular inquiry? How would he address the fact that there is always a small minority that can be consulted until the cows come homein whatever efficient or inefficient waybut that ultimately, if the outcome of the inquiry does not go its way, it feels that it has not had a fair say?

Brian Binley: I thank my hon. Friend for that interjection because it raises an important point. The obvious answer is to bring in professionals. However, to do that throughout the whole nation would be massively expensive. The alternative is to ensure that local government is much more equipped to deal with consultations from its own perspective. It should not see a consultation as simply asking the questions to get the answers that it wants. Furthermore, in a consultation where there has been a sizeable view in opposition to the councils plans, it should not then override it as being meaningless and ignore it. There is no reason why it should. There is no law that says, You have to take note of a given consultation. There is also no sanction where people who do not have a vote are involved in that consultation, and therein lies the serious problem. The whole question of consultation therefore needs to be looked at as a separate issue in local government. However, consultation is not the answer to reassuring local businesses regarding projects where the projected amount that they will need to pay is less than 33 per cent. by the levy of the rate. The second reason why they need reassurance is that very fact in itself.
I wish I could tell the Committee that the projections of a given capital project made by local authorities were worth putting great faith in. The truth of the matter is that, over the length and breadth of the country, assessment of projects by Government, and especially by local government, have been way off target when the total is presented at the end of the project.
I shall cite a situation where a local authority says that the cost to be generated from a local rate of a given project is only 30 per cent. of that rate, so there is no need for the ballot. We then find, after the ballot is taken and the rate is levied, that the cost of VAT contribution turns out to be less, in total, than was projected by the local authority. The business rate contribution therefore becomes 40 per cent. of the total. Do the Government then give that money back? There is nothing in the Bill to say that they should. Again, the situation will simply be created where business feels that it has been conned.
Business sees itself as the milch cow for the Government and has done for some time. Not only are we going to see increasing congestion charges, much of which will be paid by business, but workplace parking levies are being introduced as well. We are seeing charge after charge being levied on business, as though it can continue to provide a massive share of the money spent by Government at all levels.
The Bill will simply open up the fear that, create more suspicion that and add to the thought that the Governments only concern for business, when it comes down to action rather than words, is that it is a milch cow and is there for local government to grab whatever it can in its interests, and not necessarily in the interests of business. The only way to convince business that it has a proper say in this matter is to give it a proper vote on every project that requires a supplementary business rate.

Peter Atkinson: Before I call the Minister, as the clause before us is central to the Bill, if hon. Members want to debate it I suggest that they do so now. I will accept a more wide-ranging debate, rather than wait for a clause stand part debate at the end. That is a warning shot for anybody who has anything else to say, before I call the Minister.

John Healey: I welcome you to the Chair, Mr. Atkinson, particularly as we enter the scrutiny period of the Bill. Like other hon. Members, I look forward to serving under your chairmanship and that of your co-Chairman, Mrs. Dean. It is great to see such a strong scrutiny Committee, made up of hon. Members who have long experience in local and national Government, from the north and south of the country, and those with business experience that they can bring to bear on our deliberations. That can only strengthen our scrutiny of the Bill, and I look forward to that.
We are probably all surprised at the level of interest in this Bill in certain sections of the media over the weekend, and look forward to the amendments that may be tabled in the other place when the Bill arrives there.
The amendments that we are debating strike at the core of the Bill, which is the proper relationship between a local authority and the businesses in its area, and the degree to which there is a common, shared interest in the future prosperity and economic development of that area. I think that all hon. Members would accept that, as we heard in evidence from local government and business last week, we are considering the legislation in an era that is different from two decades ago. We must be careful not to base our judgments about this legislation on outdated mindsets, or myths about local government wanting to soak local business for everything it can get. Frankly, we put have put those days well behind us, and I was particularly encouraged to hear confirmation of that from the business organisations that gave evidence last week.
We need to deal with the sort of relationships that are currently in place and, through this Bill, how they need to be strengthened. We are legislating for the potential use of a supplement and a power not just next year or the year after, butif appropriate and if determined by a local authority with its local businessesat any time in the future, should there be a strong case for doing so.

Mark Field: On that general point, is the Minister personally uneasy at the idea that we lack a democratic safeguard in this regard? He is quite right that local authorities work much more closely with their local businesses in trying to plan for the regeneration of particular parts of the local authority area. However, as we have repeatedly pointed out, there are many business men and women who do not live in the locality. In other words, they have no say on the election of a particular authority. Does the Minister instinctively feel uneasy at the lack of any democratic safeguard, notwithstanding the desire of business and local authorities to work together more closely?

John Healey: No, because the democratic safeguard is in the elected local government. The requirement is for elected local government to account for its decisions, and to be subject to scrutiny, public cross-examination and challenge and, ultimately, to being voted out of office for those decisions. That is why the hon. Gentleman will see that, when we get to clause 2, the proposed levying authorities all have that direct democratic mandate. Some have argued that transport authorities ought to have similar powers, but they do not have a direct elected mandatethe democratic safeguard. In the end, we elect our politicians locally and nationally to make decisions that sometimes have to mediate or adjudicate between competing interests, which can sometimes never be reconciled. Ultimately, our job is to stand up and account for our decisions. If people do not like them, there is a strong debate and then, essentially, the opportunity to get rid of us. I am not uneasy in the same way as the hon. Gentleman is, because we framed the Bill to be based in democratic elected local government. That is local governments proper role, and the proper place to have the ultimate accountability.
The hon. Member for North Cornwall moved amendment 1 and indicated that he might want to press it to a vote. I hope that I can dissuade him from doing so. I shall then come on to the two central issues at the core of our debate and the other amendments: whether there should be a ballot in all cases, and whether Londons Crossrail is an exception.
Amendment 1 is directed at the question of economic development. I hope that the hon. Gentleman will find that the draft guidance, which was published on Friday, underlines what is already in the Bill. It clearly says that a business rate supplement and the funds it raises must be spent on projects that promote economic development. Before we get on to where we disagree, let me attempt to stake out territory that I am confident we agree on.
First, all members of the Committee and all our parties would accept that local authorities have a central and important role in the economic development and prospects of their area. Sir Michael Lyons was strong in his conclusion on that in his recent report. The all-party, Conservative-led Local Government Association is strongly of that view. The sub-national review of economic development and regeneration, which was published in summer 2007, concluded that. Lyons and the sub-national review, on the proposition that local authorities have an important role and require policies and some freedoms in order to play that role effectively, said that they should have the power to raise additional funds to promote economic development. That is precisely what the business rate supplement will allow them to do.
While I am on areas of agreement, I was encouraged by some words of David Frost. I was not surprised, because I know the British Chambers of Commerce and its director-general well. He confirmed that
in a number of parts of the country...there is a need for more local determination and...the ability to raise additional revenue from the business community[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 21, Q85.]
The proposition in amendment 1 is to prevent a business rate supplement from being levied unless those businesses that will pay the supplement are satisfied that the project to be funded by the BRS will promote economic development of the area. I agree with that proposition, but I can say to the hon. Member for North Cornwall that it will not come as a surprise to any businesses. As part of the different relationships that are already in place from a couple of decades ago, local authorities already develop and consider their long-term plans for economic and social development, and environmental improvement, through their sustainable community strategy, local strategic partnerships and detailed discussions with business. In almost every area of the countryevery one of us could point to significant business people in our own areas who are playing a partbusiness is involved with those discussions and ultimately, the decisions that local authorities take.
The latest example is the set of local area agreements that the Government agreed with local government last year. In all except one of the 150 local area agreements, local authorities, in wider conversations and with wider support, have picked priorities for themselves that reflect concerns about improving their local economies. For example, six of Cornwalls 28 local area agreement priorities are economic in nature; three of Bromleys 30 targets are focused on the economy. The hon. Member for Cities of London and Westminster may be interested to know that his local authority is the only local authority out of the 150 in the country not to make any of its priorities economic. That is a matter for the local authority, and no doubt it has discussed it with local businesses.
Coming back to the BRS, that sort of discussion and consultation will be part and parcel of any consideration that a local authority gives to the potential role for a business rate supplement, even before the formal consultation stage, which we shall come to later in our deliberations. Any proposal will need to explain clearly why it is necessary to consider the project, even before consideration is given to funding it. The Bill and the draft guidance that I have published make it clear that any proposed project plan should set out how the project will improve the economic development of an area. I sympathise with the proposition of the hon. Member for North Cornwall, but in practice the amendment would mean that the local authority would need to demonstrate that the majority of the business community that might be affected by a BRS was satisfied that it would promote economic development before it could go ahead. It is difficult to see how one could satisfy that requirement without a ballot.
In other words, the local authority would be balloting on whether the majority of the businesses thought that the project proposed would contribute to economic development, and not on whether businesses accepted or agreed with the idea that a BRS might play a part. That is clearly absurd. The amendment would lead to serial balloting in the process of a BRS and that is its ultimate flaw. I shall come to the arguments of principle regarding balloting in a moment, but if the hon. Gentleman presses amendment 1 to a vote, that is the logical and practical flaw in his proposal.
Not least because of my local involvements, but also as a Minister, as the Committee would expect, I understand keenly and clearly the concerns that businesses have about the business rate supplement, although they are from time to time rather overstated, which does not necessarily do their case much good.

Brian Binley: I find that remark rather surprising. Is the Minister saying that a robust opposition to a given Government proposal will be less well favoured because of its robustness? Is that what he is telling us? If so, that is a worrying situation.

John Healey: Noquite the opposite. The strength of the case and the extent to which it is likely to be carried in the decisions that the Government or this House take rest on how well it is put, not simply on how strongly it is put. It is as true in this field as in any other that organisations sometimes do not best serve their cause by overstating the concerns and anxieties that are at stake. Nevertheless, in framing this Bill we have taken the concerns of business seriously.
One of the safeguards in the Bill, which we will come on to in more detail, is the requirement for any local authority, if the BRS is expected to contribute more than a third of the total proportion of any project cost, to be subject to a ballot. That is despite equally strong arguments from the all-party Conservative-led Local Government Association that there should be no requirement for a ballot, and that any ballot should be a decision for the local authority itself, as appropriate. The all-party Select Committee also takes a view that is different from ours. It does not seek the requirement to have a ballot where a projects cost amounts to more than a third from BRS.
The evidence sessions bore this out. On the one hand, we had the CBI saying that we should have ballots in every case, whatever the contribution from the BRS. The LGA argued that ballots are unnecessary and should not take place unless the local authority decided it was appropriate. The most interesting, and overall perhaps the most balanced, evidence came from the director general of the BCC. He was clear with us in recognising the constructive relations that generally exist between local authorities, business organisations and the business community now. He also recognised the concerns that businesses have about the prospect of legislation enabling a BRS.
However, the director general ended by confirming to the Committee, in response to questions from my right hon. Friend the Member for Greenwich and Woolwich, that the BCC accepted the third threshold proposed in the Bill. That threshold is designed to recognise that business should not have a blanket veto on any business rate supplement as a contribution to a major project for an area. However, it is also designed that, where a business is likely to do more of the heavy lifting in the financing of a project, it should have that reassurance and extra opportunity to vote on its introduction.

Bob Neill: I understand the logic about the heavy lifting, but will the Minister address the point, raised by my hon. Friend the Member for Northampton, South and other Members, that the assessment of heavy lifting should perhaps not be in terms of the proportion of the expenditure as borne, but also of the quantum? One can envisage some schemes where a quarter will amount to a financial contribution that could fairly be described as heavy lifting.

John Healey: We deal with quantum concerns with the Bills proposal that there will be a 2p cap on the scale of a business rate supplement. That is an area where we were again urged strongly by all parties in the LGA to go a lot further, and we will come on to debate that.

Nick Raynsford: Does my right hon. Friend not think it slightly odd that the hon. Member for Bromley and Chislehurst, who argued that Crossrail should not be subject to a ballot but that every other scheme should be, is now suggesting that the quantum of the contribution should be a factor? There can be no scheme that I can imagine in which there is a greater quantum of contribution from business than Crossrail. Is that not an indication of how hopelessly confused and intellectually bankrupt the Oppositions case is?

John Healey: Quite so. I also think that it exposes the weakness of an approach that says that one specifies quantum figures in legislation because it is difficult to do so in a way that is appropriate for all parts of the country. My right hon. Friend is right. The Bill is framed so that, in the case of Crossrail, the quantum across Greater London would raise about £178 million a year. The quantum of a similar supplement raised across Northamptonshire would be just over £9 million.
Frankly, we in this House cannot legislate on that sort of thing without creating an inflexibility that would be totally dysfunctional. I understand the quantum question being a concern of business, but we are dealing with that by a cap on the size of the levy and by a threshold of a £50,000 rateable value above which businesses would be liable for any business rate supplementat a stroke taking out the vast majority of businesses in any area.

Brian Binley: What analytical statistical base did the Government use to set its figure of a third as the cut-off point for a ballot? I assume there is an analytical base, and I would love to have it explained.

John Healey: It is a matter of studying the impact assessment of any business rate supplement and, in the end, a judgment. We believe that the judgment strikes the right balance, as I described earlier. I shall come to that in a moment, but now I would like to turn to the two principal questions that underpin the different amendments of the Conservatives and the Liberals.
First, both parties amendments propose that there should be a ballot in all cases in which the levying authority wishes to introduce a business rate supplement. Second, they propose that the requirement to have a ballot should not apply to London.

Daniel Rogerson: The Minister is accurately setting out the position of my party and, I believe, of the Conservatives, except in one respect. He just said that the ballot requirement should not apply to London, but that is not what our proposal says; it says that it should not apply to Crossrail. At some point in the future, when Crossrail has been funded and we are all happily taking trains through the heart of London, if other projects emerge, they should be subject to a ballot in the same way. We were specific about saying Crossrail, not London.

John Healey: I shall deal with in a moment. To all intents and purposes, for the discussions and the proposition before the Committee and before Londonthe business rate supplementthe proposal is to levy to the 2p limit. That proposal comes from the Mayor and will fund Crossrail for 24 years. The hon. Gentleman may be taking a very long view and seeking framework legislation for 25 years plus, but the core of the argument is not changed by the technicalities of his slightly deficient amendment.
Our third requirement for a ballot applies across the boardto be clear, it is not limited to any type of project or to any geographical area. The two principal questions raised by the debate are whether the Committee accepts that any contributionhowever large or small a proportion of a projectfrom a business rate supplement should be subject to a vote and, secondly, whether we accept that Crossrail is unique and therefore warrants unique treatment in the legislation. I am disappointed that the hon. Member for Bromley and Chislehurst is still arguing from the Front Bench that London is an exception to the rest of the countryparticularly when Crossrail is of national significance, not least with the national taxpayer putting in the largest single contribution to the funding package.
I cannot accept what underpins the hon. Gentlemans basic argument: that there should be one rule for London and one rule for the rest of the country. In the gentlest terms, that is such a narrow viewone, unfortunately, that we suffered throughout the 1980s and 1990s, when Government economic policy could barely see beyond the limits of Greater London and the south-east, and through which so many of the economic problems and economic potential of the rest of the country were largely ignored. I do not want us to legislate for the BRS in a way that says, We are interested in London, we will legislate for London and the rest of the country can go hang. I cannot accept that as a basic proposition for the hon. Gentlemans amendments.

Mark Field: I do not wish to go down the narrow alleyway of a history lesson, but the Minister will be aware that many people in his own party are expressing concerns today at the rescue of the banking systemat the perception that it is a London rescue, with a lot of other industries obviously having great difficulties with the credit crunch.
I go back to the point I made earlier to my hon. Friend the Member for Bromley and Chislehurst. If we were discussing this Bill ten years ago, no doubt Crossrail would be part and parcel of these amendments. In other words, we would not be making any exception for Crossrail. It is simply a fact that Crossrail is so far down the line that it should be given the go-ahead and not necessarily be subject to the ballot safeguards that we regard as important. Looking forwardI go back to what the hon. Member for North Cornwall had to saywe are not trying to make London an exception; we are making the specific Crossrail project an exception.

John Healey: For the purposes of this debate and Bill, London and the Crossrail project are the same thing. To divide them is a false basis for argument. I am disappointed that the Liberal Democrats are taking such a London-only view, essentially overlooking the interests of vast swathes of the country, some of which is led by Liberal Democrat local councils.
Let me come to the two principal questionsfirst, the one of balance.

Bob Neill: With respect to the Ministerbecause I am sure he does not want to misrepresent what has been saidif he is saying that there is genuine concern for the rest of the country, I accept it. Can he answer why, if we are to pursue an evidence-based approach, there is no evidence from the LGA of anywhere else in the country with a desire to take up the powers proposed for them?

John Healey: Surely the hon. Gentleman accepts that any Government ought to be looking to the long term and ought to be capable of legislating and coming up with policy that is not simply in response to the demands placed on them. I hope that in this passage of the Bill we will see a different approach from his party from five years ago, when it raised exactly the same opposition to business improvement districts, through which we set a new framework, allowing local authorities to discuss and develop with local businesses propositions to benefit their areas. It was a visionary move and forward-looking legislation from the Governmentand, in particular, from the then Minister who led it through the House, my right hon. Friend the Member for Greenwich and Woolwichwhich has proved a great success over recent years. There are 67 business improvement districts in place, many in areas led by Conservative local councils. I encourage the hon. Gentleman to take that longer-term view of the legislation that the Committee is considering this morning.

Brian Binley: Is the Minister not raising the same concern that we arethat the BIDs project was specifically designed to involve business at every stage of the process?

Sadiq Khan: So why did you oppose it?

Brian Binley: I did not. I was not here. I will speak for myself on this matter, so I do not want any of that nonsense.
Business is involved at every stage of the BIDs process, which has the effect of bringing business into the humble issue of community and its impact on the people whom we serve. That is the opposite of this exercise, which will drive business away because it will not be involved. It will just see the price at the end of the day and know whether it was right or wrong, whether it has been balloted or not, quite frankly. So the Bill is not doing what BIDs did, and that is one of its failures.

John Healey: I am grateful to the hon. Gentleman, who gives me the cue to go on to BIDs. He encourages me to use BIDs as a model, and others have cited them as the proper model for a BRS. However, the BRS is unlike BIDs in a number of ways. BIDs have a time limit of five years and their footprint is essentially localised. They are often there to support revenue funding for things such as improvements in local streets and police community support officersthings where the benefit to the businesses involved are direct and immediate. Unlike BIDs, schemes funded by the BRSCrossrail is the clearest case in pointare likely to be considered appropriate for much wider areas and to offer much wider benefits, beyond the immediate interests of the businesses in that area and, because of the likely time scales, beyond the interests of those businesses that may, if the BRS is introduced, be paying it. So the BRS is different from BIDs, which leads us to our view that the balloting question needs to be dealt with differently.
Let me tie in the question of Crossrail at this point. Like Crossrail, any other potential project that might attract a BRS will almost certainly involve other sources of funding. Local council tax payers, through local authorities, make a contribution; national taxpayers, through central Government, make a contribution; and they are likely to do so precisely because of those wider benefits that such a project could bring across a wider area.
Let me say what for me is the principal question. Where other sources of funding are part of the package for a big project bringing wider benefits, and where there is a will to see investment from other sources so that such projects bring those wider benefitsjust like Crossrailthose who argue for a ballot in all cases have to explain whether it is right that businesses should, in all those cases, have a vote and a veto on whether the project goes ahead? In other words, should business be able to block projects even if the will, the desire and the approval is there from people who are not in business but who have an interest in the benefits that a project could bring to an area? Is it right that businesses should have that vote and veto when they may be paying a quarter or a tenth of the project funding, or when a BRS may contribute a negligible proportion of it? That is the question at the heart of whether a ballot is right in all circumstances, and that is why we have taken the view that it is not right to give businesses a vote and a veto in all circumstances, whatever the proportion of funding for a project they would contribute, but that it is right to put a ballot in place where business is required to pay moremore than a thirdof the project costs.
I now turn to the question of Crossrail. Is it unique and should it therefore warrant unique treatment in the Bill? In my view, Crossrail is a very special project but it is not unique. It is special in its scale. For the purposes of the BRS, it is also well developed: its business plan, project plan and funding package are clear. To that extent, it is well ahead of the field in relation to the potential use of the BRS. However, I think it is easy for Members of all parties here to consider that other major transport projects similar to Crossrail may be highly desirable, play a big part in economic development and bring benefits to other areas of the countryprojects for which the BRS could play a part in the funding package. They may bring a similar relative investment and have similar relative economic importance as Crossrail.
The hon. Member for North Cornwall has argued that Crossrail is special because it has been subject to legislation. Some transport projects in the future, for which the BRS may be appropriate, may also require legislation. If they do, why rule them out of benefiting from a BRS, using that argument to justify a carve-out for Crossrail? The point is that, when Parliament has considered a project and given it the go-aheadCrossrail in this instance, but potentially other transport projects in other areasis it right that a business vote could stop the project later? Essentially, that is the argument advanced by the hon. Member for North Cornwall. He is trying to justifying a rather odd position, which, when I gave evidence, I describedperhaps a bit harshly, but I still maintain that this is the caseas illogical and intellectually inconsistent.
Crossrail is specialit is more advanced than any other potential projectbut it is not unique in terms of what we, or other areas of the country, may want to use BRS to contribute towards. For that reason, it is not correct to say that it needs a special carve-out, and that we should invent a set of principles to cushion Crossrail and give it special treatment in the Bill.
I hope that the Committee will forgive me for dwelling a rather long time on that point. I shall deal with the points that have been raised and the amendments, but I dwelt on those questions because they go to the core of the Bill, and many other points that we will come on to are in a sense derived from the decisions that the Committee and Parliament will take on them.
We will discuss the provisions for detailed consultation and explore concerns about business consultation and influence on any potential use of the BRS under clauses 5 and 6, but I can say now that levying authorities that want to use the BRS will be required to draw up a prospectus, which will be the basis for formal consultation. The prospectus will need to set out the detailed plans for expenditure, including the time scales and funding sources, in addition to how the supplement will work, the assessment of economic benefits that could be brought to the area and the costs of the project; I have published the draft guidance that will help to frame that requirement to consult. The prospectus will allow businesses to see clearly and cross-examine the costs and benefits that may be proposed. I published the draft guidance at this stage partly for formal consultation over the next 12 weeks and partly to inform the Committees deliberations of the relevant clauses when we get to them. In summary, we are trying to strike an appropriate balance.

Brian Binley: Would the Minister be so kind as to give way?

John Healey: I am drawing to a close, but I will give way to the hon. Gentleman.

Brian Binley: I am still concerned about local authorities ability to consult and the quality of the consultation. Will the Minister give us some reassurance that, as part of the process of ensuring that the Bill works fairly and properly, he will ensure that that quality is improved?

John Healey: I am grateful to the hon. Gentleman for his intervention. Indeed, part of my purpose in producing the draft guidance covering consultation is precisely to collect views, particularly from people such as himself who may be concerned about the nature of the consultation process over the next 12 weeks, on whether that could be strengthened, and if so, how. If the hon. Gentleman wants to submit a view to me, I would be pleased to receive it.
In summary, we are trying to strike a balance between giving business a degree of reassurance to which we believe it is entitled, and the interests of others, including local residents, who may benefit from or share an interest with business in a project supported by a BRS going ahead, and who may contribute a share of such a projects funding. On the question of balloting, those others may therefore say that it is appropriate to give business a vote or a veto if a BRS is to contribute a third or more towards a projects costs, but not if it makes a smaller contribution and the financial heavy lifting comes from other sources. Business should not be able to block a projects going ahead on that basis.
I hope that, in the light of the explanations that I have given during our debate, amendment 1 will be withdrawn and the hon. Members for North Cornwall and for Bromley and Chislehurst will not press their other amendments, but will accept that we have striven to strike an appropriate balance in the Bill.

Daniel Rogerson: I wonder whether I might seek your guidance, Mr. Atkinson, before I remark on the Ministers point about pressing amendments to a vote. Would it be possible to vote on amendments 1, 5 to 7, 10 and 12 all together? I do not intend to press them to a vote now, but would it be possible to vote on them en bloc, or would there have to be a separate vote on each?

Peter Atkinson: No, we cannot do that. We would only vote on amendment 1 at this stage. If hon. Members want to vote on the subsequent amendments, which have been grouped with amendment 1 for the convenience of debate, they will have to be voted on in their proper place in the Bill later.

Daniel Rogerson: Thank you, Mr. Atkinson. I will signify my intention to press for a vote when we reach the appropriate point. The reason I mention that is that, as the Minister has quite rightly pointed out, amendment 1 relates to the theme under discussion, namely consultation with business and being able to demonstrate that business supports the scheme, but the crucial issue is the ballot, which, as I understand it, is dealt with later in the Bill. We will have the opportunity to vote on, for example, amendments 5 to 7, which are on the issue of a ballot, when we reach them. That is the crucial question for hon. Members, certainly on this side of the Committee.

Peter Atkinson: That is correct.

Bob Neill: Along similar lines to the hon. Gentleman, I point out that amendment 25, which is the principal amendment in my namethe others are essentially consequentialis grouped here for the purpose of debate, but it is actually an amendment to clause 4, and I therefore wish to put the Committee on notice that when we reach it, in due course, I anticipate dividing the Committee.

Peter Atkinson: I am getting some helpful guidance. If hon. Members indicate that they wish to vote on amendment 25 when that comes, they will not be able to vote on amendment 5, as the one cancels out the other. So voting will be restricted to amendment 25 or amendment 5, but not both.

Bob Neill: But we can have a vote on amendment 1 now, Mr. Atkinson?

Peter Atkinson: Yes. I am sorry to have interrupted, Mr. Rogerson.

Daniel Rogerson: I do appreciate that I threw the debate slightly off course with my question, Mr. Atkinson.
This has been a useful debate on what is the most important issue for many of the witnesses we heard from in our previous sessions. I will focus, first of all, on the points made by the Minister in response to the individual amendments.
Amendment 1 would set out a clear indication that the business communitys views matter, and that for a project to proceed it must be clear that the business community is convinced that the economic development case has been made. Although I accept the Ministers claim that the only way to do that would be to have a ballot, I would have thought that it might be possible to set out clearly in that ballot that the business community supports the measures in light of the intention to promote the economic development of the area.
The Minister made a number of further points about balloting, and therefore amendments 5 to 7 and 10 to 12, as well as amendment 25, to which the hon. Member for Bromley and Chislehurst has just referred. Why should we not have a ballot for Crossrail? The hon. Member for Cities of London and Westminster made a very good point when he said that if Crossrail were a new project being proposed subsequent to the Bill being considered, of course we would be calling for a ballot. However, Crossrail is different; in the view of many, it is unique. In the Ministers view, it is not unique; it is very much the same as any other project which might emerge, but I think the time scale makes it very different. Most of the witnesses that we heard from were clear in pointing out that they felt it to be unique as well. I think that most politicians in London would say that Crossrail is a project of unique significance, having had vast amounts of consultation and scrutiny. I therefore believe that it is of a different magnitude, or at least that we have arrived at a formulation different from that for any subsequent scheme elsewhere in the country.
The Minister said that he was sympathetic. I am very grateful for his sympathy and he did look as though he was wrestling with himself and was quite anguished as he tried to reconcile all these important arguments. It might help to point out that, unlike the Conservative partywe will no doubt develop this argument when we debate later clausesmy party does not believe that this measure should be restricted to London. We believe that it is a useful tool, and we heard from the Local Government Association that many projects may now emerge that require a BRS. We do not have a problem with that as a concept. The problem is that there needs to be a ballot. That is our opinion and that of many organisations representing the business community.
The distinction between not having a ballot on Crossrail specifically and not having a ballot in London at all is crucial. The Minister said that 25 years may be the lifetime of this legislation and by then it may well have effectively run its course. A few years ago, it was my privilege to serve on the Committee considering the Bill that became the Commons Act 2006, where we were looking at legislation that dated from the 12th and 13th centuries. It is important that we consider the possibility that future projects in London will be funded under any regulations that we play our part in approving. Most people accept that there is a difference between Crossrail and other projects that may emerge elsewhere in the country.
The Minister returned to a point that he made in his evidence to the Committee that a ballot will effectively give business a veto over those projects. I think that he is saying that if a third or more of the cost of a project is funded by the BRS, he is quite happy for the business community to have a veto, but if it is slightly less1 per cent. less for examplehe is not happy for it to have a veto. I do not believe that it is a veto, but he has presented it to the Committee in those terms. Government Members who say that there is an intellectual inconsistency ought to consider their own arguments about this conceptor spectreof a veto quite closely, because surely they apply equally whether the contribution is more than a third or less.
The lower the proportion of the overall financial package provided by a BRS, the less important it is to that projects advancement. Far from being a veto, the ballot is merely a way for the business community to say to all the other funding partners that it is not convinced that it will reap equal benefit from the economic development in question, so they should go back and look at it again. That important point needs to be borne in mind. Through the consultation, local elections and the mechanisms for contributions that may be made by central Government to a project that is proposed by an elected government body, there is in many cases accountability to these other sectionsa veto, if one likes, on behalf of the other funding partners. To pick out the business community and say that it will be handled differently is inconsistent and unfortunate. Regardless of whether the BRS will form more or less than a third of the funding package, the point is that it is still 2p on the rate to a business in an area where a BRS is imposed. It will be of no comfort to the business that the overall contribution is less than a third, because it is still paying its 2p, without the benefit of a vote. The fundamental problem with the Governments argument is that businesses in an area where a greater contribution is to be made are to be allowed to have their say, even though their own contribution will be no different from that of businesses in an area where the contribution makes up less than a third of the funding package.
There are problems and intellectual inconsistencies in the Governments argument. I therefore very much wish to press the amendment to a vote, so that we can have the Committees decision on that important question. I would also like the opportunity later of a vote on whether a ballot is crucial to the proposal. I believe that it is, and I therefore signal my intention to press to a vote my amendments on the ballot proposal.

Question put, That the amendment be made.

The Committee divided: Ayes 6, Noes 8.

Question accordingly negatived.

Clause 1 ordered to stand part of the Bill.

Clause 2

Levying authorities

Bob Neill: I beg to move amendment 22, in clause 2, page 1, leave out lines 17 to 20.

Peter Atkinson: With this it will be convenient to discuss the following: amendment 23, in clause 2, page 2, leave out lines 1 to 5.
Amendment 24, in clause 3, page 2, leave out lines 44 and 45.
Amendment 38, in clause 5, page 3, line 29, leave out subsection (2).
Amendment 39, in clause 5, page 3, line 36, leave out subsection (4).
Amendment 44, in schedule 2, page 23, line 26, leave out sub-paragraph (3).
Amendment 40, in clause 28, page 17, line 42, leave out subsection (3).
Amendment 41, in clause 29, page 18, line 21, leave out paragraph (b).
Amendment 42, in clause 29, page 18, line 44, leave out paragraph (b).
Amendment 43, in clause 30, page 19, line 6, leave out paragraph (b).

Bob Neill: As hon. Members will appreciate, the effect of the amendments is to restrict the scope of the definition of levying authority to the Greater London authority. I can be brief because this harks back to our earlier debate, but I was not convinced by the Ministers reply, for the reasons already stated. We believe that it is possible to decouple Crossrail from the roll-out of BRS elsewhere nationally. Amendments 22 and 23 amend the definition of levying authority in clause 2 and the other amendments are consequential, changing the references to levying authorities elsewhere in the Bill. The arguments have been made; I need not say more.

John Healey: Essentially, the amendments would make a business rate supplement an option for London only, removing the possibility for other local authorities in England and Wales to choose to fund a project through a business rate supplement. It is precisely the sort of special treatment that we cannot accept as a Labour Government, and especially as a party that is concerned about the whole country. We are concerned about jobs, investment and the long-term business success of all parts of the country, not only London.
As I have tried to explain to the Committee, we do not accept the arguments made this morning that London is different and should be treated differently in the Bill, or that Crossrail is different. It is the most developed example of a project for which a business rate supplement is appropriate. It is an exemplar, rather than an exception, and from it we can draw good lessons for the way in which a BRS could and should work in other areas.
During our evidence sessions, I was struck by the fact that both business and local government representatives accepted the principle that a BRS should be available across the country, not only in London, despite their concerns about details such as balloting. There is a lot to gain from giving local authorities greater ability to raise investment for local economies, particularly in the way that we require them to do so: in consultation and in partnership with business. The potential would be lost if the amendments were accepted. I hope that the hon. Member for Bromley and Chislehurst will not insist on pressing them, but if he does, I will ask my hon. Friends to resist.

Bob Neill: I have listened to the Minister and he is superficially persuasive. Unfortunately, the Governments actions belie their reasonable words. He presents the measure as an enabling opportunity for the rest of the country, but there is great suspicion of the Governments real motives elsewhere in the country. For the reasons rehearsed, there is acceptance that a funding package for Crossrail is in place that people now want to implement. However, juxtaposing this new potential tax-raising power given to local authorities elsewhere and the Governments slashing the money available for local authorities to support business development gives rise to a real fear that the proposal comes from the Treasurys desire to transfer burdens from central Government to local businesses.

John Healey: Does the hon. Gentleman know by how much central Government funding to local authorities is increasing in 2009-10? He is looking blank, so I shall tell him: 4.2 per cent. Combine that with the fact that it is the second year of a three-year settlement, which has secured certainty for local government, and with the removal of restrictions that were in place on many of the funding streams. The proposal gives local authorities greater freedom to decide their priorities and to fund them.

Bob Neill: It was not a blank look; it was astonishment at the Ministers chutzpah in trying that one on. In reality, he knows that that 4.2 per cent. relates to the overall funding settlement. He knows perfectly well that that has been roundly criticised by the local authority associations, in particular because it does not reflect the many costs shunted on to local authorities and the additional burdens such as adult social care, or the fact that local authorities are seriously suffering over the outworking of the formula, which he and I have discussed in the past.

John Healey: I am interested in the stance that the hon. Gentleman is taking, not least because his partys leader and shadow Chancellor have already set out national plans for the coming financial year, which would involve a £3.7 billion cut in general Government expenditure. If not an increase of 4.2 per cent., as we propose for next year, what would his settlement be for local government in the next financial year?

Bob Neill: The Minister will not get away with that one either

Peter Atkinson: Order. Nor will the hon. Gentleman. That is out of order.

Bob Neill: My specific response is that the Minister knows full well that that and his earlier comments, which were in order, do not present the whole picture. The funding for the local authority business growth incentives scheme, which is specifically targeted at assisting business and economic development, has been reduced from £1 billion over the past three years to £150 million over the next two years. That is why people are suspicious.

Peter Atkinson: Order. May I say to the hon. Gentleman and the Minister that we are not having a debate about that issue, so I would be grateful if we could call it a day?

Bob Neill: You will have gathered from all I have said, Mr. Atkinson, that I am unconvinced by the Ministers response. I will give way to the hon. Member for North Cornwall because I am sure he will be in orderhe always is.

Daniel Rogerson: I am grateful that the hon. Gentleman thinks so. I want to clarify: is the position of the hon. Gentlemans party that the provisions of this Billthat is, to be an extra tool for local government with the business communityeven if subject to a ballot, should not be applied anywhere other than on Crossrail in London?

Bob Neill: We do not believe it is timely for rolling out elsewhere in current circumstances but in due course there are other, better means to give business incentives to local authorities. We are not convinced by this mechanism at this time, except for getting Crossrail up and running.

Peter Atkinson: Is the hon. Gentleman proposing to withdraw this amendment?

Bob Neill: No. I wish the Committee to vote on it.

Question put, That the amendment be made.

The Committee divided: Ayes 4, Noes 8.

Question accordingly negatived.

Clause 2 ordered to stand part of the Bill.

Clause 3

Use of money raised by a BRS

Bob Neill: I beg to move amendment 46, in clause 3, page 2, line 10, at end insert , and
(c) which promotes the economic well-being of its area, including the provision of transport infrastructure and the promotion of employment and employment skills, investment, regeneration, business efficiency and competitiveness..

Peter Atkinson: With this it will be convenient to discuss amendment 2, in clause 3, page 2, line 18, at beginning insert primary and secondary.

Bob Neill: We now turn to definitions of the use of money raised by BRS. I tabled the amendment in a spirit of genuine enquiry and helpfulness.
One concern raised in the evidence sessions by a number of witnesses from the business community was the definition of economic development. It links to the concerns that are rightly set out in the consultation document that the Minister has provided about how the business community can be reassured that there is genuine additionality in the funding and, if business is to contribute, how it can be assured that the money is genuinely channelled towards economic benefits, rather than substituted for funding for other activities.
The clause starts by referring to
expenditure...on the project to which the BRS relates,
but subsection (3) defines what the money can be used for almost by exclusion. It says what BRS money cannot be spent on, but you will remember, Mr. Atkinson, that in the evidence sessions many business organisations said that they would like the Bill to contain a more comprehensive definition of what it could be spent on by way of economic development. The amendment endeavours to achieve that.
If the amendment were made, as well as saying that the BRS money may be spent only on the project to which the BRS relates and that the authority would otherwise not have incurred that expenditureit is genuinely additionalthe clause would state that the BRS money may be spent only in a way that promotes the economic well-being of the local authoritys area. We set out specific examples of such expenditure, which I suspect have been well rehearsed, both in the documentary evidencethe White Paperand our evidence sessions. I do not think that anyone would argue against such areas of expenditure attracting the interest of authorities for a BRS scheme, but the amendment is intended to reassure businesses that there is a requirement to stick to a definition that is in the Bill, and that should for any reason there be a straying beyond that, they would have recourse through the usual provisionsjudicial review and so on.
I am sure that local authorities would not stray, but the amendment is intended to help and to make the spirit of co-operation more effective, which I am sure is something that, after the controversy of the earlier debates, we all genuinely wish to see, having got thus far. That is the spirit in which I move the amendment, and I am interested to hear what the Minister says about how we can achieve that better definition, which seemed to be a genuinenot an obstructivedesire on the part of business.

Nick Raynsford: I shall not detain the Committee long, but I cannot fail to observe the extraordinary contortions and intellectual confusion displayed by the Opposition. We have just heard them arguing that the Bill should be limited to London and the Crossrail scheme; however, the amendment, which was obviously tabled at the same time as the others, is based on a widening of the remit to include provision for training, employment and other desirable objectives, which the hon. Member for Bromley and Chislehurst knows perfectly well could not be contemplated for at least 25 years because the proceeds of the business rate supplement have been predicated in London for the support of Crossrail throughout that period.

Bob Neill: The right hon. Gentleman is always courteous, but I am sure that he will appreciatehe has been here long enoughthat it is not beyond the wit of anyone to have worked out that had we by some chance and some fluke of arithmetic in the Committee succeeded in limiting the Bill to Crossrail, I might not have moved the amendment. I would have thought that that was obvious.

Nick Raynsford: So here we have the Opposition, who have said emphatically that they do not want anywhere else in the country to get the benefit of the provision, saying that although they would like to see the remit expanded to include certain activities such as training and skills development, those things would not be available anywhere else in the country. They would only be available in London where they could not work because the proceeds of the business rate supplement have been predicated for at least 25 years on Crossrail. That is a product of a party the whole approach of which on this subject of relations between business and industry and the promotion of economic development shows no sign whatsoever of an ability to learn any lessons.
The Conservative party wrong-footed itself five years ago when it opposed BIDs. It did not understand the importance of the scheme, to which it is now, at a late date, a convert. It recognises that it made a mistake, but it cannot learn a lesson and it is about to commit the same mistake again. I forecast that in a few years time we will hear the Conservatives talking about how excellent it is to have a framework in which business and the local authority can work together for economy developmentbusiness rate supplements. I look forward to that day when wisdom prevails, but in the meantime I am appalled at the Oppositions incoherence.

Daniel Rogerson: Although I share the concerns of the hon. Member for Bromley and Chislehurst and his hon. Friends about some aspects of the Bill, I agree with the right hon. Member for Greenwich and Woolwich on this issue. As we saw in the last vote, there is a clear difference between the parties views on whether the provisions should be availablesubject to a ballot, which we have already discussedoutside London. My party believes that the provisions should be available in other parts of the country, as long as there is a clear coming together of the business community, local government and all the other funders to deliver.
I shall speak to the amendments that stand in my name and that of my hon. Friend the Member for Solihull to highlight the thinking behind them. They are probing amendments, to which I hope the Minister will have the opportunity to respond briefly. Amendment 2 deals with education. We question whether there might be provision for training and skills to be involved in a scheme is funded by a BRS, as opposed to specific primary and secondary education, which is funded as a core function of the relevant authority. The purpose of the amendment is to probe the Government and see whether their intention is to allow local authorities, as part of their economic development schemes, to fund in that way the provision of training and skills.

Brian Binley: I was rather taken aback by the remarks of the right hon. Member for Greenwich and Woolwich. It seems to me that there was a sizeable degree of illogical thinking in those remarks. He is the man who presented the BIDs concept to this House and who said that it was vital for business to be as involved as it possibly could be in all the activities relating to the project. He is clearly aware of the need to encourage businesses to be involved, and, I have no doubt, the great scepticism that businesses, particularly small and medium-sized businesses, feel about expenditure that is said to be to their great benefit. They hear those words and become frightened, because all too often in the past they have been told that a particular project or fundraising exercise will be to their benefit, but have found that they are the payers, to very little benefit indeed.
I would have thought that the right hon. Gentleman, who produced the BIDs scheme so well, would have supported the argument that to create confidence within the business community, we need to define the role that a business rate supplement can play and the projects it can be involved with as precisely as we are able. The more open the definition, the more room there is for suspicion in the business community, particularly in small and medium-sized businesses. It is that sector that will be particularly hurt if the burden of a large project lasting 10 or 15 years is placed on it to extract the BRS. I would have thought that he would be pleading with the Minister to expand the definition, on the basis that that would give greater confidence to the business sector.
The business sector made it clear to us that it is immensely concerned about the loopholes in the Bill, which it thinks is loosely written. It is concerned about giving local authorities the right to extract what it sees as greater dues from them. To define that in more sensible terms would be helpful. I urge the Minister to take that plea seriously. If he is unable to tell us today what he might do, he should come back with a better definition, even though he might reject the amendment.

John Healey: I am grateful for this short debate. We are dealing with an important part of the Bill, which is drafted to give the sort of assurance that the hon. Member for Northampton, South seeks and, to some extent, the clarification that the hon. Member for North Cornwall is looking for. I suspect that there is no great difference in our general approach to the provisions and to what is right in principle. I accept the intention of the hon. Member for Bromley and Chislehurst in moving the amendment. He is concerned about substitution, as indeed is the hon. Member for Northampton, South.
I shall deal first with amendment 2; in a sense, it touches on the same concernthe risk of substitution. In other words, BRS might be used to fund services for which local authorities should already be providing funding. Were the hon. Gentleman inclined to press the amendment to a Division, I should make it clear that it seems to weaken the safeguards because it narrows the definition set out in clause 3(3)(c) to primary and secondary education rather than broader education services. The effect would be that the business rate supplement would be restricted to primary and secondary schooling.
If hon. Members consider the guidance that was published on Friday, they will realise that local authorities could not propose using BRS revenue to fund housing, social services, education services in general, services for children, health services or planning services. We made that provision for a reason. The Bill is designed to give the reassurance that local authorities cannot use BRS as a supplement to fund services that it has a statutory obligation to provide.
On the question of training and skills, if a proposition was part of a prospectus that demonstrated an investment in training and skills and in promoting the economic development of an area, it could be acceptable for BRS to be an element of such funding. If the hon. Member for North Cornwall was using amendment 2 to seek such an indication, he now has it and will not need to press it to a Division.
Amendment 46 proposes that BRS revenue could be used only to fund expenditure that promotes the economic well-being of an area, including
the provision of transport infrastructure and the promotion of employment and employment skills, investment, regeneration, business efficiency and competitiveness.
I understand why the hon. Member for Bromley and Chislehurst might want to probe, but the amendment would unnecessarily limit the potential use of BRS.
The Bill already contains clear and appropriate limitations. Clause 1 makes it clear that BRS revenue can be spent only on projects that, the authority has established, contribute to and promote the economic development of an area. As I said, clause 3 prevents sums raised by BRS from contributing to the provision of services that a local authority has a statutory obligation to provide.
The third limitationor lock, if the Committee willsis that the Bill makes it clear that BRS funds cannot be used for expenditure that the authority would have incurred if it had not established a BRS. Although limits are appropriatewe have set them out in various parts of the Billwe do not want to be too prescriptive or restrictive on whether a local authority could use BRS revenues. Provided that the link to economic development can be properly established, it is right that local authorities should have the freedom to propose the type of project for which they wish to use BRS funding.
I hope the Committee will accept that general approach. If members have detailed views on how to frame guidance, I would encourage them to submit those views to the consultation that I launched on Friday.

Bob Neill: I am grateful to the Minister for that response. I hope that he will undertake that the Department will be equally open-minded in its discussion with business over the guidance. If that is a means whereby this can be achieved, then so be it; I am more interested in the objective than the means.

John Healey: May I say clearly to the hon. Gentleman and to the Committee that I would welcome it if business organisations that wish to contribute viewseither formally, in writing to the consultation, or during the consultation periodwere to approach us. I encourage my officials to hold such discussions with business organisations where they have views to contribute on this question.

Bob Neill: I am grateful to the Minister for his helpful response. Against that background, having probed the issue and had a useful debate, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Daniel Rogerson: I beg to move amendment 3, in clause 3, page 2, line 26, leave out The Greater London Authority and insert A levying authority.

Peter Atkinson: With this it will be convenient to discuss amendment 4, in clause 3, page 2, line 27, leave out the Greater London Authority and insert a levying authority.

Daniel Rogerson: I apologise for the unseemly haste with which I was seeking to debate this issue under the previous group. These amendments look further at what may or may not be done with the money and how it may be used by the organisations that might be involved in spending it. They are probing amendments and are intended to help us understand the Governments point of view.
As I understand it, provisions under clause 3 allow the GLA, as a levying authority, to permit other bodies to spend some of that money in pursuance of a project, but not in other cases. The Minister referred to passenger transport authorities in other parts of the country, which are not directly elected and therefore are not intended to be levying authorities. However, they may well be involved in the spending of moneys, or the delivery of a scheme. We are seeking to understand how they might be involved, and whether there are provisions in the Bill to allow for that money to be moved. I am sure that the Minister will correct me if I am wrong, but I am assuming that the current provisions are there to allow the GLA, for example, to work with particular boroughs if they are incurring some of the costs of part of the delivery of a project, so that the money could be reimbursed to them. If that is the case, we are trying to find out whether there needs to be flexibility in other parts of the country for other relevant authorities to spend some of that money.

Bob Neill: I have heard what the hon. Gentleman said, but I am not entirely sure what he is driving at. The Minister may be able to help me, but my understanding is that the references to the GLA in this context arise because of the particular nature of the relationship between the GLA and its functional bodies, Transport for London being the most obvious one in this area. However, it is unique and does not relate to any situation elsewhere in the country. Perhaps that is the answer to the hon. Gentlemans situation, to some degree.

John Healey: I am grateful to the hon. Member for Bromley and Chislehurst for trying to assist me. However, despite the amendments and the remarks by the hon. Member for North Cornwall, neither of which are clear, I am not sure what he is seeking an answer to. I would welcome an intervention to clarify that; otherwise, I shall consult the record and try to sort it out.

Daniel Rogerson: As a London MP, the hon. Member for Bromley and Chislehurst has clarified some of the issues in this provision. I was merely seeking to find out whether the Minister felt that there might be circumstances in other parts of the country where a BRS might be in operation, where similar arrangements would need to be in place to allow money to be moved between organisations. I sense that the Minister is about to find some inspiration on this and I am sure he will reassure me that these amendments will not be necessary.

John Healey: I think that my mind is becoming a little clearer. We have framed the legislation to allow other local authorities, singularly or together if they are proposing a BRS, to enter into arrangements for part of the delivery of a particular project that may be supported by a BRS in the same way that we are making provision for the GLA and TfL, which we know will be necessary for the one clearly BRS-related project that is on the stocksCrossrail. I am confident that we have framed the legislation to cover that possibility were it sensible or required in other areas related to a BRS, but I shall look again at our provisions if the hon. Gentleman thinks we have not.

Daniel Rogerson: I am grateful to the Minister, and to the hon. Member for Bromley and Chislehurst for clarifying the matter. Hon. Members from at least two parties are keen to see that, with certain safeguards, other areas of the country may be able to explore the option. I wanted to ensure that they have similar provisions in place, allowing them to make best use of it and allowing efficient delivery, as in the provisions set out for London in the case of Crossrail. With that reassurance, and the Ministers saying that he will look at the provisions again if necessary, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Clause 4

Conditions for imposing a BRS

Amendment proposed: No. 25, in clause 4, page 3, line 21, leave out from beginning to second ballot and insert a.(Robert Neill.)

Question put, That the amendment be made:

The Committee divided: Ayes 5, Noes 8.

Question accordingly negatived.

Clause 4 ordered to stand part of the Bill.

Clause 5

Prospectus

Daniel Rogerson: I beg to move amendment 8, in clause 5, page 3, line 35, after office, insert
, and the principal offices of any relevant billing authority,.
It may seem a minor point, but although we have had discussions about London and particular circumstances that pertain there, certain circumstances pertain to rural potential levying authorities as well, given the great distances involved. The provision in clause 5, as it stands, sensibly says that a prospectus should be available on the internet and copies should be available for inspection at the principal office of the levying authority. That may be a problem in two-tier authoritiesit may well be in Londonwhere the levying authority is a body at some distance from people. Those people may be involved in a lengthy, sometimes difficult journey in order to go and inspect the prospectus, if they do not have the ability to look at it on the web or if they would prefer to see a hard copy and ask questions of the relevant officer when they are consulting it.
The point of my amendment 8 is that the principal offices of the relevant billing authority should also be in possession of those documents for people to inspect, so that those living at some distance from county hall, for example, in a large rural county, where there may not be particularly regular or frequent public transport, have the opportunity to consult the documents. The prospectus concerns everybody, so although the business community will naturally want to have a look, council tax payers too, for example, might want to view the prospectus and contribute to the general consultation. It is important, therefore, that people living in the area covered by the levying authority have the maximum opportunity to inspect the prospectus. It seems sensible, therefore, to extend the provision of the relevant documents to the offices of billing authorities as well as to those of the levying authorities.

Bob Neill: The hon. Gentleman raises a fair point.

Brian Binley: I am also concerned about this matter. I have already drawn attention to what I consider to be the weakness in the ability of local authorities to consult properly. Part of that weakness lies not only in the document produced for consultation but in the ability to make people aware of such documents. That affects the entire prospectus issue. Will the Minister consider ways to notify the public of what is going on in the first place, so that they can visit sites where the prospectus might be available? Will he also consider increasing the number of those sites? In rural areas, in particular, finding out about such matters in the first place is a serious problem, not to mention getting to the place where the information can be obtained. In particular, some elderly business people might not be quite up to using the internet in ways that we might expect.

Sadiq Khan: The hon. Member for North Cornwall introduced his amendment by saying that it was a minor one, but it is not, for three principal reasons: first, because it gives me the opportunity to welcome you, Mr. Atkinson, and to say what a pleasure it is to serve under your chairmanship; secondly, because it allows me to make my maiden voyage in my new role, which it is a pleasure to have; and thirdly because it gives me the chance to introduce a series of clauses that set out in more detail some of the requirements contained in clause 4, which we have not yet had a chance to discuss.
Amendment No. 8 would require hard copies of the prospectus to be made available at the principal offices of the billing authority as well as the authority proposed in the supplement. We are keen to ensure that prospectuses are easily accessible during the consultation, which is why we have required hard copies to be made available at the principal offices of the levying authority and why electronic copies will need to be available on that authoritys website. I accept the need for accessibility, but that need should be balanced with the additional costs that we expect authorities to meet when proposing a supplement. Authorities will not be able to recoup the costs of producing and publishing a prospectus through the BRSnot that anyone is suggesting that they should. We need to show some restraint, therefore, in the requirements that we place on authorities.
Nothing is preventing a good local authority, especially in a rural part of the country, from doing the very sensible things suggested by the hon. Members for North Cornwall and for Northampton, South. The latter made a very good point: we must not all assume that everyone is computer literate and has access to the web. We expect local authorities to take note of their points. They know their areas better than we in Whitehall do. Committee members, whichever side of the Committee they sit, do not want us in Whitehall to impose burdens on local authorities when elected councillors know their communities far better than we do.
We are trying to set out an approach that strikes the right balance to ensure that prospectuses are widely available while keeping costs minimal. Requiring billing authorities to make copies of the prospectus available at the principal offices, which the amendment would do, would increase costs and be prescriptive, but would not necessarily result in a significant improvement in availability. Making copies available in the principal offices of the lower-tier authorities could lead to confusion for ratepayers, who might not realise that the upper-tier authoritythe levying authorityis responsible for the project. That is a big concern for the Committee. For that reason, I urge the hon. Gentleman to withdraw his amendment, which is by no means a minor one.

Daniel Rogerson: I am somewhat mystified by the argument that the Minister is seeking to make. For potentially multi-million pound projects, we are talking about a bit of photocopying and the provision of a prospectus. His right hon. Friend the Minister for Local Government will be well aware that the situation in my local area is about to change. At present we have six district authorities, which would be billing authorities, and Cornwall county council, which as the top tier would be the levying authority if the provisions were enacted. Providing six copies of the relevant information to bring it that much closer in a very rural authority such as CornwallI use it as an example because it is the one that I know bestwould make a difference.
I accept, of course, that local authorities may choose to provide that information elsewhere, but the business community, local taxpayers and so on are used to the billing authority being the authority with which they interact when paying their bills and having any queries answered.

Sadiq Khan: Does the hon. Gentleman accept that what we envisage and what his example demonstrates is a conversation between businesses and key stakeholders? His point about rural parts of the country relates to our hope that stakeholders will join the conversation. Some people call that consultation; some call it partnership. During the course of that discussion and consultation, we would expect such points to be made. We expect that good local authorities, such as the one that he is fortunate to have in his constituency, would respect the views of key stakeholders and ensure that copies were available, but does he believe that we in Whitehall should impose that throughout the country?

Daniel Rogerson: Absolutely, just as I believe that we should impose a ballot, at the risk of being out of order. The provisions are crucial to ensuring that adequate safeguards are in place so that people have the opportunity to interact. The Minister rightly points out that there will be a consultation process, which is to be welcomed. Were I proposing that every business should be sent a copy of the prospectus, I might agree that that would be burdensome to the local authorities involved. However, to say that a copy should be available nearby at the local authority office for consultation is not particularly burdensome.
I did not anticipate pressing the amendment to a vote, because I thought that the Government might graciously give way and accept that it was a beneficial provision that would improve the Bill. However, having heard the Ministers argument and not being convinced by it, I must press it to a vote.

Question put, That the amendment be made:

The Committee divided: Ayes 5, Noes 8.

Question accordingly negatived.

Clause 5 ordered to stand part of the Bill.

Schedule 1

Information to be included in a prospectus for a BRS

Bob Neill: I beg to move amendment 35, in schedule 1, page 22, line 16, at end insert
11A A description of the arrangement by which persons paying the BRS shall be represented upon the governing body of any organisation set up for the purpose of delivering the objectives of the BRS, or if, such organisation is not to be set up, how such persons are to be involved in the oversight of the delivery of those objectives..
We come to another measure about which concerns were raised by the witnesses from the business community who gave oral and written evidence. We have sought to strengthen the involvement of business, something that the Ministers have said they desire. I hope that we can broach it in a constructive spirit.
In response to an earlier question, the Minister said he hoped that a dialogue would go on in the drawing up of the BRS schemes. I do not dispute it; I also hope that that is the case, but we think that it needs to go a stage further. As well as dialogue beforehand, there needs to be an ongoing dialogue about the implementation and outworking of the scheme. If businesses are contributing, in varying degrees, it is important that they do not lose control once something is signed off and is up and running. I suspect that it will be in everyones interests to have ongoing business involvement.
The Governments proposals talk in terms of the national project panel in the drawing-up and creation phase. Obviously, it is not practical to have that in the implementation phase, but I hope that it might be possible to ensure that there is business involvement in implementation, as businesses have skills and experience that they could bring to bear to ensure that the BRS is rolled out in the most cost-effective and efficient manner. They would then have a stake in it, and would be able to supplement the skills that local authority and other public bodies have in that regard, thereby making for collaboration.
In some cases, the local authority will propose to deliver the scheme itself, but in others it might be necessary to set up a special purpose vehicle to deliver the scheme, particularly if there is an infrastructure project. Such a vehicle might have a board of directors or some other governing body; its nature could vary according to the legal status of the organisation set up to deliver the purpose, or the SPV. We seek a mechanism whereby business would be represented on and involved in that governing body, or controlling mind, in relation to delivery as well as planning. It seems logical to achieve the sort of partnership and collaboration that I accept Ministers want. That is the background.
We hope that the amendment would be a constructive addition to the Bill. It would not only reinforce business confidence, but bring practical benefits to both business and the broader community, including council tax payers, by ensuring that there was efficient outturn for the project, which will have been given the go-ahead.

Daniel Rogerson: I am sympathetic to what is set out in the hon. Gentlemans amendment. We have heard at some length how successful the BIDs model has been, around the country, at delivering extra investment in a very localised area. In addition to the ballot issue, which we have addressed, part of that model concerns the ongoing engagement and involvement of all the funding partners in delivering the scheme, so that they have confidence that it is being delivered in accordance with what was originally set out, and so that any slight variations, or reports on how things are proceeding, are part of engagement in line with previous consultation.
I am sympathetic to the idea that a similar case could be made for having greater involvement in the delivery of a project that a BRS would fund. We have previously debated, or at least discussed, the fact that we do not have the tradition of having a core, uniform business rate for local authorities, but this issue is over and above that. Business is being asked to contribute, and it is important to have some reassurance that business will be heard and that we will get the benefit of business experience. In delivering projects of this kind, it would undoubtedly be beneficial if local businesses that are strongly engaged with economic activity had such opportunities.

Lorely Burt: Does my hon. Friend agree that there is also a concept of natural democratic justice in the proposal, which would involve and use the expertise of local business, thereby gaining commitment? Given that local business is being required to make an economic contribution, surely it should have a say in the running of the project and how it proceeds.

Daniel Rogerson: My hon. Friend has made her point very well. Her experience of business is no doubt reflected in her contribution.

The Chairman adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Four oclock.